Not to mention the huge variety of original, one-of-a-kind collectors`

items indigenous to the area: mahogany furniture and tableware; hand embroideries, sculptures, paintings; the fashions, jewelry and accessories confected by talented resident designers; island liqueurs; epicurean condiments; fragrant tropical spices and perfumes. One globe-trotting travel agent, with access to the markets of four continents, chooses to do all her Christmas shopping in the Caribbean.

To make the Caribbean even more attractive, customs regulations have been relaxed. Thanks to the Caribbean Basin Initiative, no fewer than 2,766 categories of West Indian-made merchandise-more than half of those contained in the total Tariff Schedule of the U.S.-can enter the United States duty-free. This provision applies to the products of virtually all the archipelago except the French islands. As full-fledged Departments of France, these are considered part of France, and, therefore, do not qualify as developing economies. They do, however, offer their own incentives, such as a 20 percent discount on merchandise purchased with travelers` checks.

Even on imported goods, which are subject to U.S. tariffs, regulations are affordable: no tax on up to $400 worth (retail value), provided it`s not for resale; that you`ve been out of the U.S. for at least 48 hours; and have not claimed the exemption within the preceding 30 days. Duty is charged on the next $1,000 at a flat 10 percent-not much more than the sales tax you would pay in some parts of the U.S. (but not in the Virgin Islands).

The U.S. Virgin Islands offer American visitors double allowance ($800 per person), which may include five cartons of duty-free cigarettes and five- fifths of liquor (as opposed to one-fifth elsewhere). A family can pool their exemptions, and if that`s not enough to cover the value of your dutiable purchases, those beyond $800 is taxed at the rate of 5 percent. Virgin Islands visitors also have the right to mail home an unlimited number of gift packages (with minimal restrictions), provided they don`t exceed $100 in value. Even without this advantage, the U.S. Virgin Islands continue to attract customers in droves. By and large, pricing is pretty competitive, and selection is exceptional.

Besides the preferential tariff situation, consider also the differences in listed retail prices. A Piaget lady`s mini-Polo, for example, pegged at $8,900 in the U.S., sells for $6,720 at H. Stern in St. Thomas. There, too, the Movado men`s Museum watch, tagged $1,190 on the mainland, costs $760. Prestigious Little Switzerland (18 stores on seven islands) carries Rolexes with price tags 25 percent lower than those featured in the U.S. On their Rosenthal china and crystal the difference is 40 percent.

A Waterford goblet, priced around $50 in the States, can be had at Stecher`s in Trinidad for $30. Pay around $100 in travelers` checks to Roger Albert in Martinique for Opium perfume, costing about twice that in the States. Polo Ralph Lauren Factory Store in Old San Juan offers 30 to 50 percent reductions on its apparel, accessories and some home furnishings.

Finally, how do shipboard boutiques and airport shops stack up against Caribbean shops? It depends. Island airport counters, often branches of in-town emporiums, usually about match them in prices. On the mainland, however, though others may disagree, we`ve not found bargain bonanzas in the free-port terminal stores.

As for cruise ship boutiques, they do have decided advantages. Ocean Trading, the London-based parent company that operates so many shipboard boutiques, has considerable buying power and few governmental expenses. This can be reflected in lower prices. On the down side, selection is limited.

What it all comes down to is this: Know before you go. Check the catalogues, clip the ads. Use one of the several island toll-free telephone numbers and check out prices in advance. A.H. Riise Gift shops in St. Thomas, for example (800-524-2037), not only puts out a complete listing of all perfume prices, but will even mail you your purchases. You also might ask them to send you literature on the many other lines of quality merchandise they handle. The same applies to Little Switzerland (800-524-2010) and the English Shop (800-524-2013).